Traditionally, health economics studies the manner in which limited resources are allocated to provide better health care services. It also takes into consideration how medical services can be better distributed among individuals and groups. Currently, the healthcare industry is becoming more cost-conscious, which is why medical devices manufacturers are looking for the best solutions that would bring down the cost of production without compromising on quality.
The two key focus areas for every medical device company, regardless of their size, are:
- Better access to the market
- Increase in reimbursement
Often small-sized organizations, adopt health economics to boost the sale of their tools and gain higher acceptability for their diagnostics. The major players, on the other hand, adopt health economics initiatives to reach the best value – for both medical devices as well as patient outcomes. Our health plan market intelligence studies show that manufacturers are sure to benefit if health economics is put into play right at the initial stages of product development. This strategy helps companies to commercialize their products in a better manner and thereby disrupt the market to their advantage.
Benefits of health economic analysis in the medical devices market
Health economics analysis (HEA) enables the manufacturers to gain a clear understanding of the direct as well as indirect costs of medical intervention. Different models are adopted to understand how a particular medical device would get a better access to the market as well as meet the manufacturer’s reimbursement goals. HEA provides a clear picture on the sustainability of the business strategy of any medical device company. It does this by examining:
- Cost-functionality: By taking technology costs and utility outcomes of the medical devices into consideration, HEA indicates how functional is the product for the patient. Cost-functionality also brings into perspective if the patient is keen to pay for high-cost devices without guaranteed high clinical benefits.
- Cost-minimization: Health economics is all about finding the best viable alternative medical solution at the least possible cost. For instance, if a low cost technology can provide the same benefit as an existing high-cost one – it is beneficial for both the patient and the manufacturer.
- Cost-effectiveness: Here the clinical outcome of the alternate technologies is examined in a detailed manner. While the cost of technology is measured in monetary terms, an increase in life expectancy determines the overall health benefits of the product.
The focus of healthcare systems across the globe is on reducing the cost of health services per person. Advances in medical technology and higher dependency on medical devices has made it imperative for those in the medical devices industry to take health economics into serious consideration.